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00:05Ben, thank you so much for this.
00:07Yes, better than expected numbers from Zurich Insurance this morning for the first half.
00:11Beating expectations, lifting guidance for a live, the stock is up 1.4% pre-market.
00:16I've got with me Mario Greco, the CEO of Zurich Insurance.
00:19Mario, always great to speak with you.
00:20Talk me through the highlights of what has been clearly a very strong first half.
00:26We are seeing markets which offer opportunities but also huge risks.
00:32So I think we navigated through that.
00:34We shrunk the property casualty part of the market which is very soft.
00:39And we expanded ourselves in the property casualty part of the market which is more interesting, more attractive in the
00:46margins.
00:47Life, extraordinary performance, we counted on that.
00:51And we lifted the guidance for the rest of the year because we see more coming in the second half
00:56of the year.
00:57And farmers, very solid performance in a competitive market.
01:01We think the farmers is beating competitors and we're very proud of seeing that.
01:05Now what I see in the numbers here is very strong growth when it comes to construction.
01:10And we know data centers, AI, the whole value chain falls under that.
01:14Where are you seeing that growth?
01:16And most importantly, where do you see the biggest concentration?
01:19Is it in the U.S.?
01:21It was in the U.S.
01:23We started doing the data center technology developments in the U.S. three years ago.
01:30We continued.
01:31Now we see more and more expansion of that into Europe, into the Middle East, into Asia.
01:37This is the core business for Zurich.
01:39This is where Zurich had experience over so many years in the past.
01:44We have hundreds of people specialized on construction, infrastructures, development.
01:49And this is incredibly good work for us.
01:52So the fact that this business is diversifying into other regions of the world, that's positive, right?
01:58Because what the market is concerned about is too much concentration when it comes to one particular market.
02:03And the question is how the insurance industry is dealing with that risk of over concentration.
02:08How are you spreading the risk here?
02:11First of all, we run this not just a construction of pure risk.
02:17We offer a complete set of services.
02:21We call it the vertical.
02:22So we ensure everything that it's about constructing one of these big projects and delivering it,
02:30which already means that we spread the risk because it is also about the workers' comp.
02:36It's about motorists, about marine to ship all the furnitures there.
02:43It's energy, which is so important.
02:45So how to provide the energy solution to the place.
02:49And again, we have specialized people who have been working on similar projects for decades.
02:54Then the regional expansion is very important because the risks also are about the weather,
03:00are about the local geographical exposure to a weather phenomenon.
03:06And the more we spread it around the world, the better it is as it's always with the insurance business.
03:12Securitization has come up in terms of the insurance sector spreading the risk here.
03:16Is that a profitable avenue?
03:19It's more than profitable.
03:23I would say it's needed now because, of course, we need reinsurers.
03:28So we need capital protection to take all these exposures ourselves.
03:32And we're stretching the limits of the reinsurers by growing the business so fast.
03:39And with the concentration, especially in the U.S., the insurers got really stretched.
03:45So securitization, alternative forms of capital, alternative protection, it is so important for us to continue doing the business.
03:53Mario, you mentioned the weather before.
03:55I've got to ask you about the very, very unfortunate events unfolding in Europe over the last couple of weeks.
04:01Wildfires.
04:02How much, to what extent are you impacted by that?
04:06And how is the insurance industry dealing with that?
04:08Are certain regions becoming uninsurable?
04:12Yeah, we never say that whether events, whether risks are uninsurable.
04:19They're all insurable.
04:21The question is the cost.
04:23Because it becomes more and more expensive.
04:26Wildfires, and we have a lot of experience from the U.S. and Australia on wildfires, can be prevented, can
04:33be mitigated.
04:34But they require systemic intervention, which often countries, local jurisdictions, governments, they're not ready to do because they don't really
04:46visualize, they don't feel the risk yet.
04:49But the risk is there.
04:50We don't have a real exposure to these events who are happening these days in Europe.
04:57That's not going to be material for us.
05:00But this is something that we have been dealing with, and we know how to cope with, and we know
05:06how to prevent and mitigate them.
05:08But the trouble is, the protection gap is so huge.
05:11How do we highlight this?
05:13You as an insurer, you have an important job here as well.
05:16Correct.
05:16Correct.
05:17And I think we do that.
05:18We continue to talk to organizations, countries, to local jurisdictions, to make them aware.
05:27We created years ago a unit which we call Resilient Solutions, which goes to customers and support them in creating
05:35this prevention and mitigation solutions there.
05:39We do everything we can.
05:41But, yes, there is a gap.
05:43Before we have a gap in protection, there is a gap in awareness.
05:48Right.
05:48This is a riskier world than it was years ago, and we should become aware of it and take the
05:55actions needed.
05:56Mario, finally, let me ask you.
05:58You're at mid-cycle when it comes to your current target range.
06:02You're ahead of the targets here.
06:04Now, very soon you're going to have to formulate new targets.
06:07Are you going to be the one seeing through the new cycle?
06:11We will formulate the new targets next year.
06:15But before we get there, I want to fully deliver on these targets and possibly continue exceeding on the targets.
06:23We will also rethink about our strategy because we have worked 10 years on a strategy which has paid off
06:32extremely well, but it is now 10 years old.
06:37So we need to develop a new one for the future, and this is work for next year.
06:42And, yes, I will do that and I will lead that.
06:45All right, final point here on M&A, massive M&A just ahead of you in terms of completion the
06:51second half of the year.
06:52Beasley, of course, $11 billion deal.
06:55I guess you're done when it comes to M&A.
06:58Is there anything else you want to add to the portfolio?
07:00No.
07:01We're done for the year.
07:03We did three important transactions, a live transaction in Australia, a property and casualty transaction in Ireland,
07:10and then Beasley in the UK market.
07:13That's enough for this year.
07:15Then we need to generate the returns, the synergy, the benefits for the shareholders.
07:20And then definitely we'll see for the future what else is needed or accreted for us.
07:27We'll see you next time.
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